Silicon Valley’s Rising Professional Sport Franchises Win Talent Wars
Silicon Valley stands to gain crucial business advantage in the fight for the world’s best technical talent with the construction of two stadiums for professional sports teams.
But landing the Oakland Athletics baseball franchise would create an even more compelling troika and could unleash a tidal wave of people and economic stimulation to transform the long-struggling downtown San Jose into something new.
A panel of business and government leaders said June 20 at Mountain View’s Computer History Museum that the start of construction for the more than $1 billion stadium for the 49ers in Santa Clara and the $70 million stadium in San Jose for the Earthquakes professional soccer team was momentous for the region.
“Our workers are essential ingredients, and we need to compete for that talent. Arts, sports—they attract people,” Carl Guardino, president and chief executive of the Silicon Valley Leadership Group, told an audience of 300 at “The Breakfast of Champions,” a discussion sponsored by The Registry. “What excites us the most about major league baseball in downtown San Jose is not just the stadium and the sports, it is the increased vibrancy,” he said.
The SVLG is a business and quality-of-life advocate that represents more than 375 member companies with operations in the region. Collectively the companies employ one in three Silicon Valley workers, Guardino said. The group has advocated on behalf of all three sports enterprises in Silicon Valley.
Guardino was one of four business and government leaders to participate in The Registry’s panel discussion. Others were the mayors of San Jose and Santa Clara, Chuck Reed and Jamie Matthews, respectively; and John Michael Sobrato, chief executive of The Sobrato Organization, a large multifamily and office-property owner in Silicon Valley.
Lewis Wolff, chairman and chief executive of Wolff Urban Development and co-owner of the Oakland Athletics and San Jose Earthquakes, was keynote speaker.
The purpose of the session was to cast light on how the sports enterprises might impact the South Bay economy, including its property markets. Both the 49ers and Earthquakes’ stadiums are privately funded.
Less than a decade ago, the South of Market district in San Francisco enjoyed little of its current cache and popularity. Now it is among the hottest office and commercial property markets in the country. “What caused it? The first thing was AT&T Park,” Sobrato said. Entrepreneurs then established bars and restaurants in the area. That in turn created “buzz.” That buzz attracted the young engineers, “and the companies followed,” he said.
He calculated the effect of 81 baseball games a season played in the downtown, estimating that it would bring 2.5 million new people a year to the urban center, Sobrato said. That is in addition to the folks already there for games of the San Jose Sharks professional hockey team. “What downtown needs is people and people when the Sharks aren’t playing. What else is going to bring 2.5 million people downtown other than sports?”
Andy Poppink, managing director for Jones Lang LaSalle in its Silicon Valley office, moderated the panel’s discussion. New research from JLL shows that employment in the fast-growing high-tech services sector is rising nearly twice as fast in San Francisco as it is in Santa Clara County and that San Francisco’s workforce is more educated and younger than Silicon Valley’s.
San Jose Mayor Chuck Reed said, “It is easy for me to understand the economic impact of the A’s or the Earthquakes because I understand the impact of the HP Pavilion. The A’s would be twice that. And it is far more than an economic impact. We are trying to keep Silicon Valley as the innovation center of the world, and we need creative people to be excited about living here.”
The 49ers broke ground on their 68,500-seat football stadium in April and hope to have the 1.85 million square-foot building complete by August 2014. The stadium will have the capacity to expand to 80,000 seats for special occasions, such as the 2016 Super Bowl, which the team is already trying to confirm. It is the first football-only stadium built in California since the San Diego Chargers opened what is now known as Qualcomm Stadium in 1967.
Santa Clara citizens embraced the new San Francisco 49ers stadium because it held the promise of giving their town and Silicon Valley an iconic building and institution that it lacks now, said Mayor Matthews. “It was a matter of timing and being able to respond. When someone is there ready to invest, find a way to make it happen because the opportunity could be lost,” he said.
The Earthquakes also hope to break ground this year on their 18,000-seat stadium and to finish 12 months later. The project gained final development rights in February when the San Jose Planning Commission voted unanimously to allow it on a site adjacent to the Mineta San Jose International Airport.
But Wolff and the city of San Jose have thus far been unable to relocate the Athletics to downtown San Jose because of objections from the San Francisco Giants. The proposed San Jose site is near the HP Pavilion and not far from the Earthquakes’ location. It has abundant developable land nearby and some of the best transportation infrastructure in the state including a Caltrain station and a future BART station, Reed said.
Wolff has extensive business interests in downtown San Jose, including the 805-room Fairmont San Jose, the 240-room Holiday Inn San Jose and the historic Sainte Claire hotel. Both the Fairmont and the Sainte Claire face Cesar Chavez Park.
If the A’s are unable to locate in San Jose, they will likely leave the Bay Area. “Our goal is to stay in the Bay Area if we can,” Wolff said.
While the Earthquakes’ stadium development is part of a larger revitalization scheme involving multiple properties along Coleman Avenue fronting the airport—and the reinvigoration is occurring slowly—Wolff said he was discouraged by the lengthy entitlement process for the stadium and bothered by similar experiences in San Jose since the late 1990s, where process has consumed or nearly consumed various projects.
“The cost of indecision and endless study is greater than I’ve ever seen before,” he told the group. “It hurts lower-income families, construction people, people not trained in technology. We have to sit and watch three or four people delay projects that could be helpful to economic stimulation.”
Next to the stadium site, there is a newly developed 185,000-square-foot shopping center called Coleman Landings. A proposed 1.5 million square-foot office complex dubbed Coleman Highline with support retail and lodging also has been entitled for the other side. All three are in an area sandwiched between the airport and multiple rail lines, not far from an existing Caltrain station in Santa Clara. The aesthetic improvements to the area compared to its past are strong and promise to improve with time. Despite this evident success, Wolff said his difficult experience to get to the stadium’s approval was not unique across California: “There are hundreds of projects like mine out there.”
PHOTO BY: Kent Goetz